Target Healthcare REIT Swings to Pretax Loss Despite Rental Income Growth

By Najat Kantouar

Target Healthcare REIT reported a swing to a pretax loss for fiscal 2023 despite a rise in rental income, while net asset value fell.
The U.K. medical properties investment trust said Tuesday that for the year ended June 30, pretax loss was 6.6 million pounds ($8.1 million) compared with a profit of GBP49.1 million, driven by a swing to loss on the valuation of investment properties.

Contractual rent increased by 2.0% to GBP56.6 million compared with GBP55.5 million, including a like-for-like increase of 3.8% as a result of rent reviews.
Total net asset value return fell by 1.2%, with valuation uplifts of 1.5% in the second half of the financial year due to inflation-linked leases.
Adjusted EPRA earnings per share–a key industry metric–increased 18.8% to 6.0 pence per share compared with 5.0 pence.
“Our portfolio is performing strongly, benefiting from our initiatives to dispose of non-core assets, from further capex to refresh or enhance our real estate, from our active engagement with tenants, and from the more favourable trading environment. Our vacancy rate remains at nil with rent collection, rent cover and underlying resident occupancy all improving,” Chairman Alison Fyfe said.
The board remains confident in the trust growth and increases dividend by 2.0% to 1.428 pence per share in line with rental growth.
Write to Najat Kantouar at najat.kantouar@wsj.com